Agency fails to secure deposit from tenants after 6 months and tenants have now moved out!

Agency fails to secure deposit from tenants after 6 months and tenants have now moved out!

9:21 AM, 27th February 2024, About 2 months ago 9

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Hi, I’m currently renting my property out through a letting agency. The tenancy was a fixed two-year contract. Of course, commission had to be paid upfront for the two years.

It is a three-bed flat and a few months into the tenancy, one of the tenants wanted to move out. The agency said that the tenant had to find a replacement or else pay their share of the rest of the tenancy. The tenant found a replacement but advertised the room with a no-deposit clause. Over the next 12 months, this happened another four times.

Each time when the new tenant moved in, they filled out the necessary documentation with the letting agency, however, they never received a contract to sign. The agency said that the reason this had happened was because the tenants had refused to pay a deposit. The agency tried for three months to get the tenants to pay a deposit but to no avail.

Last week I got an email from the agency informing me that the tenants are moving out. Tonight I found out that the tenants are no longer in the flat. In the meantime, the rent for the next month has not been paid. How do I proceed?

I’ve spoken to one of the tenants that moved out and they said that after waiting for months for a contract from the agency, they were not keen on continuing to stay in the property. In addition, they felt that they did not want to pay a deposit when the advertisement from the previous tenants had said it was not necessary.

From what I can gather the agency has failed miserably in getting the tenants to sign the contract and securing a deposit. On the other hand, the original tenants had misinformed the incoming tenants on the obligation regarding a deposit. At some point in this whole drama, the agency had said last year that no matter what, the original tenants would be liable for any damage etc as their names were still on the agreement.

On speaking to the original tenants, they feel that when they engaged the agency to sign up the new tenants, they expected that their obligation had ended.

Where do I stand? Who owes me rent? And can I sue the agency for not securing a deposit as is part of the agreement, as well as for the damages, commission lost and loss of income.

Thanks,

Natascha


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Comments

Graham Bowcock

11:32 AM, 27th February 2024, About 2 months ago

Hi Natascha

This sounds like a bit of a mess.

If you have employed and agent - and paid them - then they must be your first point of contact to give you a full explanation of events.

Most agents do nto require payment in advance - that's sharp practice and gives them little incentive to sort things out.

I think the agent has failed to keep control of the tenants comings and goings; they must owe you a duty of care. It's not clear, however, that they owe you any money - you'd have to read your contract with them. At the very least they should meet you part way due to being embarrassed (!)

I doubt you could sue for failing to collect a deposit unless you have actually incurred a loss.

It is possible that the original tenants remain liable for the proeprty, but it will really depend on correspondence with them.

DAMIEN RAFFERTY

11:42 AM, 27th February 2024, About 2 months ago

Not a Rent to Rent agreement ?
You are responsible at the end of the day.
Did YOU ensure that the deposit was protected within 30 days of it being paid.
Is the lettings agents part of the redress scheme and which one is it registered with ?
Time to read your contract.
You won't get your rent this month and need to check the condition of the propertty.
Do any repairs and make sure you have an up to date EPC, EICR, GSC,
Video Inventory, PAT testing, Fire safe checks and upgrades
Get it back on the market using NRLA tenancy agreement and manage it yourself or sell

RoseD

13:59 PM, 27th February 2024, About 2 months ago

First issue you have is thinking it's correct to pay two years commission up front. Why? Letting agent commission is normal taken each month at source from the rent. What incentive do the agents have to manage this when costs already been covered. It should also be their job to find another tenant if one leaves (on agreement) not the remaining tenants. This has been very badly managed but you have clearly been made aware of the comings and goings and obviously have contact with some of them. Is this individually let rooms as it sounds to be. Does it fall under HMO regulations? Either way it's difficult to see what you might be owed. As previously suggested a good read of your contract and an in depth conversation with the letting agent might help. As for compensation....good luck with that.

Simon F

15:34 PM, 27th February 2024, About 2 months ago

The agent should still have the original deposit, and that you can claim. If they don't release it to you, take the matter up with the Redress scheme the agent is in.

David

15:44 PM, 27th February 2024, About 2 months ago

This agency sounds completely incompetent and as said has created a total mess. Im also not sure the pain is yet over. You may get deposit penalty claims at some point.

This may not be easy to unravel and you will possibly need legal help.

Jonathan Willis

17:08 PM, 27th February 2024, About 2 months ago

Given the agent says the original tenant is liable. It could be they sublet the flat, rather than ending the rental agreement and starting a new one with the new tenants. In that case, you are the head landlord, and your tenant is the landlord for the sublet tenants.

That's just one possibility, but it's unlikely as the agency is unlikely to be involved in a subletting arrangement. You'll need to speak to the original tenant, new tenants, estate agent, and look at the contracts in order to see what was actually done and who is liable.

Judith Wordsworth

19:55 PM, 27th February 2024, About 2 months ago

For 1 months rent lost I'd just breathe a sigh of relief that the tenants have all vacated.

Read what is in your contract with the letting agent - perhaps you can go down the route of breach of contract but is it worth solicitors and barristers costs and court fees. Report them to their professional association and see what they can do to redress the problem.

Where is the original deposit protected?

David Houghton

7:50 AM, 28th February 2024, About 2 months ago

Reply to the comment left by Judith Wordsworth at 27/02/2024 - 19:55
You are spit on. The issue here is are they going to claim deposit repayment. Best leave well alone and not use them again

Judith Wordsworth

11:25 AM, 2nd March 2024, About 2 months ago

Reply to the comment left by David Houghton at 28/02/2024 - 07:50
Hopefully you meant spot on not spit on lol.

OP states no deposit paid so no need for deposit repayment.

I’d like to know why 2 years agent fees was paid up front. If using an agent I’d have had the fee deductible monthly from rental income not the whole lot up front.

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